With Covid-19 wreaking havoc across the commodities world, uranium is one of the few metals that has seen a price surge in recent weeks. The global pandemic has resulted in short-term positivity for the uranium markets – punctuated by supply deficits and a growing demand for electricity as people in key nuclear energy markets stay indoors.
In April 2020, the uranium price hit a 5 year high of US$34.05/lb. This has in large part been due to the fact that over 50% of monthly mine supply has disrupted, or even offline altogether, due to Covid-19. Some of the world’s biggest uranium minessuch as Cameco’s Cigar Lake and McLean Lake Mill are, in fact, offline indefinitely.
After Fukushima, nuclear greatly fell out of favour as a key electricity generator. However, it is gaining traction now in the global supply of clean, stable, base-load power generation. Globally, we’re seeing an increased focus on lowering global carbon emissions and shifting away from fossil fuels, coupled with a growing demand for electricity.
Globally, there are 441 nuclear reactors in operation (according to the WNA), with the United States and France holding the most, with 96 and 58, respectively. There are another 100 reactors around the world in plan now, with another 60 currently under construction.
Uranium demand has been less impacted by the spread of Covid-19 than other power generating commodities, used in the transportation or construction industries. Producers, such as Cameco, have stated that they expect the current bullmarket to continue for some time, keeping uranium as one of the world’s best performing commodities during this global health and economic crisis.